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Facts
The assessee appealed an order from the NFAC which treated their appeal for AY 2018-19 as infructuous under the Vivad Se Vishwas Scheme, 2020 (VSVS). The NFAC erroneously concluded that the assessee had opted for VSVS for the present appeal, despite the assessee clarifying that their VSVS declaration was only for a penalty appeal (u/s 271D) for the same assessment year.
Held
The Tribunal found that the NFAC's order was based on an erroneous understanding of the facts. Consequently, the Tribunal quashed the NFAC's order and directed it to restore the appeal for disposal on merits, ensuring the assessee receives a proper hearing.
Key Issues
Whether the First Appellate Authority was correct in treating the appeal as infructuous under the Vivad Se Vishwas Scheme, 2020, when the assessee had opted for the scheme only for a penalty appeal and not the appeal on merits for the same assessment year.
Sections Cited
Section 143(3), Section 144C(3), Section 144B, Section 271D, Section 274, Direct Tax Vivad Se Vishwas Act, 2020
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Income Tax Appellate Tribunal, DELHI BENCHES : I : NEW DELHI
Before: SHRI PRADIP KUMAR KEDIA & SHRI ANUBHAV SHARMA
ORDER
PER ANUBHAV SHARMA, JM:
This appeal is preferred by the assessee against the order dated 18.08.2022 of the Commissioner of Income Tax (Appeals), NFAC, Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in Appeal No.NFAC/2017-18/10077107 arising out of the appeal before it against the order dated 25.11.2021 passed u/s 143(3) R.W.S. 144c(3) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the National Faceless Assessment Centre, Delhi (hereinafter referred to as the Ld. AO).
On hearing both the sides, it comes up that amongst other grounds raised
on merits, the assessee has raised a ground No.3 as follows:-
3. That in view of the facts and circumstances of the case, the Appeal Centre vide order dated 18.08.2022 ("impugned order") for Assessment Year ("AY") 2018-19 has erred in treating the appeal of the Appellant as infructuous as per the Direct Tax Vivad Se Vishwas Act, 2020. a. That in view of the facts and circumstances of the case, the Appeal Centre vide order dated 18.08.2022 has wrongly considered the fact that the Appellant opted for the Vivad Se Vishwas Scheme, 2020. b. That in view of the facts and circumstances of the case, the Appeal Centre has wrongly considered the fact that Form 5 dated 16.11.2021 has been generated in regard to the captioned appeal. с. That in view of the facts and circumstances of the case, the Appeal Centre has failed to consider the fact that the Appellant had opted for the Vivad Se Vishwas Scheme, 2020 for the penalty appeal for the same assessment year, i.e., AY 2018-19.”
On appreciation of the impugned order dated 18.08.2022 of the NFAC, we find that in para 2.0, with the following observations, the appeal of the assessee has been treated as dismissed for statistical purposes:- “2.0 It is noted that the appellant opted for the Vivad Se Vishwas Scheme 2020. As per 360 profile of the appellant in the ITBA Portal form 5 has been duly generated dated 16.11.2021. In view of the above, the appeal is treated as infructuous as per the Direct Tax Vivad Se Vishwas Act, 2020.”
The ld. AR has pointed out that the assessee has never opted for the settlement of the issues involved in the present appeal by way of settlement under Vivad Se Vishwas Scheme 2020 (VSVS) and in fact, against an order dated 29th August, 2019 passed by the ld.ACIT, Special Range-5, Delhi u/s 271D r.w.s. 274 of the Act, the assessee had approached for settlement under VSVS and the relevant Form 3 was issued after the settlement under the said scheme. Thus, it was only in regard to the disputed penalty for AY 2018-19 of Rs.7,75,650/-, Form No.5 was ultimately issued.
The ld. DR could not dispute the aforesaid facts.
In the light of the aforesaid, we are of the considered view that the impugned order of the NFAC is the outcome of an erroneous understanding of the facts and the merits of the grounds raised by the assessee needs to be decided by NFAC again.
Consequently, the aforesaid ground No.3 as submitted before us stands sustained and the impugned order of the NFAC is quashed. NFAC is directed to restore the appeal before it for disposal of the same on merits after giving due opportunity of hearing as per law to the assessee. This appeal be considered allowed for statistical purposes. Order pronounced in the open court on 20.11.2024. Sd/- Sd/- (PRADIP KUMAR KEDIA) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 20th November, 2024. dk